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The idea that environmental scanning can be a key factor in sustained competitive advantage calls for the integration of business strategy and the environment. Not surprisingly, environmental scanning is widely viewed as the first step in the process that links strategy and the environment. The main debate over the roles of strategy and environment is nowadays concerned with the primary importance of environmental scanning to strategy formulation and implementation. More specially, effective scanning of the environment is seen as necessary to the successful alignment of competitive strategies with environmental requirements and the achievement of outstanding performance in small- and medium-sized enterprises (SMEs). This chapter explores the above relationship in the British electronic manufacturing industry. It is based on the empirical evidence and the findings of a survey of 132 Chief Executive Officers’ (CEO) views on environmental scanning and strategy in SMEs. It is concluded that there is a significant relationship between increasing the environmental scanning of the firm, and the success of small- and medium-sized manufacturing firms in electronic industry. Accordingly, because of the dynamic nature of the electronics industry, obtaining information on environmental factors facilitates alignment between business strategy and its environment.